Surreal is an adjective much over-used since René Magritte, Joan Miro and Salvador Dali introduced the workings of their subconscious imaginations to an admiring art world eight decades ago.

But, for once, it may be an appropriate description of the extraordinary saga that ended in a Catalan court this week of a flamboyant British war hero whose shrewd schemes made Dali a millionaire but apparently ended disastrously when pursued for his own benefit.

John Peter Moore, a British Army captain in the Second World War who became Dali's assistant after meeting him in Italy in the Fifties, has been found guilty of doctoring one of Dali's original paintings.

He faces a demand for compensation of more than €1m (£700,000) for re-working Dali's 1969 work The Double Image of Gala, according to the Dali-Gala Foundation, which administers the artist's estate, yesterday.

Oriol Garcia, its spokesman, said a court in Figueres had ruled that Mr Moore, 85, and his wife, Catherine Perrot, had trimmed the size of the artwork, then exhibited it under a different name in their gallery in Cadaques, Dali's former summer playground near Barcelona.

The pair were accused of "violating the moral rights of the author and the integrity of an original work". The couple have been ordered to give compensation to the foundation, as well as court costs and the costs of restoring the painting.

The prosecution is a sad end to a relationship that began when the director Alexander Korda, for whom Mr Moore was working in Rome, asked Dali to paint the star of his Richard III film, Laurence Olivier. Dali wanted the entire fee in cash and Mr Moore fixed it.

He went on to become Dali's secretary and took charge of the international commercialisation of Dali's works throughout the 1970s.

But the production line created question marks over what was truly by Dali, and the enterprise was widely regarded as unscrupulous.

Copper plates found in a raid on a warehouse belonging to Mr Moore four years ago were allegedly used to make limited edition lithographs and should have been destroyed to ensure the run stayed limited. There were also accusations of fakes being sold as originals.

A search of Mr Moore's properties a year before turned up 10,000 allegedly faked Dali lithographs which he was selling for more than €1,000 each. Moore was indignant. "I have no need to make fakes. I have all the original Dalis I could possible want."

The Spanish court has dropped the prosecution for dealing in fakes because of Mr Moore's age.

Mr Moore had a point. His private collection of Dali's art was reportedly the biggest in the world and included paintings such as The Apotheosis of the Dollar, which he eventually sold to the Gala-Dali Foundation.

A Dali-Gala Foundation spokesman said yesterday it was "very satisfied" with the court decision. "This ruling represents not only the recognition of our work in defending Dali's artistic heritage and rights, but it also sets a very important precedent for the recognition and defence of authors' moral rights."

It said nothing on Dali's own role in opening the floodgates for abuse.